Money & Banking

RBI imposes monetary penalty on two Maharashtra-based urban co-operative banks

Our Bureau Mumbai October 29 | Updated on October 29, 2019 Published on October 29, 2019

The Reserve Bank of India has imposed monetary penalties aggregating ₹1.25 crore on two Maharashtra-based Urban Co-operative Banks – ₹1 crore on Janata Sahakari Bank and ₹25 lakh on Jalgaon Peoples Co-operative Bank.

The central bank, in a statement, said monetary penalty has been imposed on Pune-based Janata Sahakari Bank as its statutory inspection of the bank with reference to its financial position as on March 31, 2018, revealed non-compliance with directions issued by it on Income Recognition and Asset Classification (IRAC) norms, Management of Advances and Exposure Norms, and Statutory/ Other Restrictions and issuance of ATM-cum debit cards.

A notice was issued to the bank advising it to show cause as to why monetary penalty should not be imposed for non-compliance with the aforesaid directions.

“After considering the bank’s reply and oral submissions made during the personal hearing, the RBI came to the conclusion that the charges regarding non-compliance with the directions....warranted imposition of monetary penalty,” the statement said.

In the case of Jalgaon Peoples Co-operative Bank, the RBI said its statutory inspection of the bank with reference to its financial position as on March 31, 2018, revealed, inter alia, non-compliance with RBI directions on IRAC norms and management of advances.

A notice was issued to the bank to show cause as to why monetary penalty should not be imposed for non-compliance with the aforesaid directions.

“After considering the bank’s reply and oral submissions made during the personal hearing, the RBI concluded that the aforesaid charges warranted imposition of monetary penalty,” the central bank said.

In both the cases, the RBI said that its action is based on deficiencies in regulatory compliance, and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

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Published on October 29, 2019
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